If we support the in-laws can we claim them as dependents?

[concerned1977]

What is the name of your state (only U.S. law)? va

I'm not sure if i'm posting this in the correct location. If not, please advise on where it should be posted (maybe under immigration?). Thanks.

My in-laws will be retiring soon and moving back to el salvador for their "golden years". by the time they retire their house will be completely paid off. Our (the in-laws, my husband & I) idea is to put their house into me and my husbands name so that we can rent it out and send them the rental income to live off of. We believe we need to put the house in our name so that we can properly serve as the landlords and take care of paying the taxes (so the in-laws don't have to worry about it). We would keep a portion of the rental income in order to pay the real estate taxes and the additional income taxes that would be required on our part, but my question has to do with what happens when we file our taxes. I know that when we file our taxes the rental income would be considered our addtional income. Since we would be sending the money to El Salvador to support the in-laws could we claim them as dependents on our taxes (I think they might be able to keep dual citizenship when they move)?

They will also be receiving SSI (I need to double check how that will work out), but I'm guessing that they would still have to file taxes because of the SSI. If we claim them as dependents are they still requried to file taxes because of the SSI? It's all a bit a confusing and I'd appreciate any help or suggestions on this.

Thanks.

 

[FlyingRon]

Your beliefs are incorrect. You do not need to be owners to handle renting it out and taking care of taxes and other expenses. There can be serious tax disadvantages to doing it that way, both now and at the time of their death.

You can declare them as a dependent (for exemption purposes) if they don't have much other income and you provide more than half their support. However, you do understand that an exemption is not likely to cover much of the income you are receiving from the rental. You're going to have substantial tax liability, and if the moneys you send them exceed $13,000 per person, per year, it's going to be a gift tax concern (probably no tax at this point in time, but it eats into your lifetime estate/gift exclusion).

There's a dependent care credit, but it appears that you would NOT be eligible for this for a couple of reasons.

 

[concerned1977]

Thanks

Good to know and thanks again.